If It Wasn't For Those Darn Physicians, We'd Make MoneyPhilip Betbeze, Senior Editor-Finance

Docs just don't think like you do, and they certainly aren't motivated by the same things. But especially in these dark economic times, it's more important than ever to find common ground with them. There's no hyperbole here when I suggest that the very survival of your institution could be at stake. [Read More]

February 17, 2009

Editor's Picks

University of Southern California buys two Tenet hospitals to end disputeTwo warring factions seem to have ended a nasty little dispute with a sale. The University of Southern California will buy two Tenet-controlled hospitals totaling 471 staffed beds for $271 million, settling suits and countersuits the two entities filed against each other charging that more than $100 million in promised renovations by Tenet were never performed. The deal to fully acquire USC University Hospital and USC Kenneth Norris Jr. Cancer Hospital will allow the university to more fully integrate them with its Keck School of Medicine. The university will finance the purchase through issuance of $215 million in bond financing that has been completed and additional debt. [Read More]Maryland bill to introduce standards on free, reduced-price care at hospitals
Here's a lesson for those of you running hospitals. Behave badly and expect a legislative solution to be forced upon you. After much hue and cry about how many Maryland hospitals have filed liens on patients' primary residences for failure to pay medical bills, a new bill would require hospitals to provide free care to patients whose incomes are at or below 150% of federal poverty guidelines and would also bar hospitals from placing liens on patients' homes, ensure that hospitals provide details to state regulators about their oversight of contracts with collection agencies and attorneys, and require hospitals to provide details about the availability of financial assistance. More regulation. Yuck. The worst part is that hospitals should have seen this coming and ameliorated the problem themselves after years of problems that hospitals in other parts of the country have encountered doing exactly the same thing. Maryland hospitals are lucky the bill, which to be fair has yet to become law, isn't much worse. [Read More]University of Chicago ER to get more selectiveIn combination with a layoff of 450 people, the University of Chicago Medical Center is retooling the way its emergency department deals with patients. A study has shown that of the 80,000 people who visit the hospital's ER, more than 40% did not need to be there. The rising number of uninsured, coupled with visits for cuts, bruises and other less severe conditions, cost the hospital tens of millions of dollars a year for conditions that can be treated at community hospitals or through prescriptions. As a result of the reorganization, doctors and nurses will provide quick evaluations, or triage, before a patient is admitted. But what took so long? The hospital has long simply treated such patients and then informed them that there are other options that are both less costly and require less waiting. Sometimes it takes big losses to get the attention of those who can make such decisions, I suppose. [Read More]IBM, UnitedHealth test new 'medical home' healthcare plan
UnitedHealth will try a concept that will give doctors more authority and money than usual in return for closely monitoring their patients' progress, even when patients go to specialists or require hospitalization. The insurer will also move away from paying doctors solely on the basis of how many services they provide, and will start rewarding them more for the overall quality of care patients receive—a concept known as the "medical home," which, in theory, should reduce waste in healthcare. I'll be interested in seeing how this experiment goes, considering the amount of ink this "medical home" idea has received in recent years, with little real-world experience to back it up. A number of physicians have agreed to the experiment, mainly in Arizona, at the prodding of major employer IBM. [Read More]

Finance Forum

The Self-Pay Conundrum: How to Balance Margin and MissionAs hospitals watch their self-pay accounts receivable and bad debt increase, they find themselves in a bind. On the one hand, they know that the cost of collecting from patients is high, and that the likelihood of getting paid drops after patients leave the hospital. On the other hand, they must be sensitive to community relations and their social mission. But there is a bit of an ironic solution. Automating the self-pay financial clearance and collection process helps patients pay their bills. [Read More]

Essential and ExpensivePatient demand for intensive care services continues to rise—but ICUs cost a ton of money. Here's how some providers are making intensive care worth their financial while. [Read More]

Money TalkMidMichigan Health, Midland, MIRating: A1Outlook: StableAffected Debt: $142 millionAgency: Moody's Investors ServiceRemarks: Outlook revised from positive to stable due to the system's intent to issue approximately $100 million in new debt over the coming year support the system's ambitious capital spending plans. [Read More]

Audio FeatureVulture Valuations: Leigh Walton, a partner with the law firm of Bass Berry and Sims and the co-chair of that firm's Healthcare Practice Group, discusses the prospects for healthcare M&A in the coming year and beyond.